Welcome to the Wholesale Manager Vaping feature. The UK e-cigarette category is growing at a meteoric pace and is continuously evolving with a stream of new products and introductions. The pace of growth is quickening, with the big tobacco companies like JTI and Imperial Tobacco coming onto the scene and putting their marketing muscle behind such pioneering brands as njoy and Blu.
As we announced in our last report, from May 20th UK wholesalers and retailers need to follow the revised Tobacco Products Directive (TPD), which places new regulations on ecigarettes, up to now a largely unregulated market.
As our separate article in this feature explains, TPD’s restrictions will increase costs, decrease choice and slow the rate of innovation, but it’s not expected to be the end of British vaping by any means.
Meanwhile as independent e-cig supplier multiCIG point out, ecigarettes offer a great opportunity for retailers and wholesalers to generate additional revenue at a higher margin than they were achieving with cigarettes. Ecigarettes can be clearly displayed at the point of sale, unlike tobacco products, which must be hidden from view because of controls on merchandising.
People “vaping” are an increasingly common sight on our streets, outside pubs and in public places. But who are the target consumers? Are they hip young men enjoying a new style accessory? Or are they middle-aged people trying to give up smoking?
What emerges from the research, according to James Dunworth of E-Cigarette Direct, is that although much of the branding and marketing of ecigarettes appears to be aimed at men, in fact slightly more women than men vape.
The three major types of ecigarette are “cig-a-likes,” devices that look like cigarettes, “eGo” style e-cigs, which are about the size of a cigar, with a tank or reservoir which can be refilled with e-liquid, and “mods,” which are larger and accommodate a wide range of tanks. These are sometimes called first, second and third generation e-cigs respectively.
The choice of e-cigarette can be challenging for consumers.
Smokers may think that the familiar-looking cigarette-like options will make the transition smoother, but enthusiastic vapers often opt for mods. However, the data consistently shows that eGostyle devices are the most popular.
E-cigarette Direct’s sales data shows that over 75% of hardware sales are for second generation devices. Other research shows that second and third generation e-cigs are more effective at delivering nicotine to users.
Second and third generation devices are a little more complicated than cig-a-likes, and new users need more support.
However, this is a good opportunity for wholesalers to work with their retail customers to help them offer tailored advice and support to their customers. This is a great way to build loyalty and encourage repeat purchases.
Data shows that for smokers first making the switch, tobacco flavours are important: 65% of vapers surveyed said that they were “important” or “very important” in helping them quit smoking. But for longer-term vapers, the situation is a little different. Established vapers begin to gravitate towards fruit flavours, with 31 percent of vapers using them the most, compared to 22 percent for tobacco and 19 percent for dessert flavours. This suggests that while tobacco flavours are important, fruit and dessert flavours should also make up a substantial proportion of the wholesaler’s stock.
According to Euromonitor International, the percentage of current smokers also using e-cigs rose from 2.7% in 2010 to 17.6% in 2014. Although the growth in the ecig sector is slowing, it looks set to continue for the next few years and likely longer. Euromonitor predicts the industry reaching £16 billion in global sales by 2019, compared to around £6 billion in 2015. Vaping may be popular now, but the vast majority of smokers still don’t vape, so there is still plenty of room for growth.
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